AUDIT
SAMPLING
, Summary of things to remember
CR = low , then DR= higher to maintain Stratification : MUS (high value = overstatement)
the audit risk to an acceptable level • Division of … (populations into ➢ Population = divided into
subpopulations) monetary units
CR= low = more reliance on internal • On the basis of : ➢ Sample unit= individual
control ➢ Rand value monetary unit (R)
Smaller sample ➢ Age analysis (for debtors) ➢ After R selected = traced back
to physical item
(invoice/account)
➢ Column w/ accumulated values
of relevant account balances/
transactions
Expected error % is greater than Estimated error population is greater JUDGEMENT used in the following
tolerable error % than acceptable (tolerable) error when planning the sample:
= larger sample size = unsatisfactory result ➢ Sampling unit
➢ Acceptable error %
Think of consequences to this : ➢ Expected error %
More assurance = larger sample size ➢ Fictious sales ➢ Determining confidence level
➢ Incorrect amount in xxx ➢ Determining the definition of
Increased sample size = more accounts ➢ Amount in that journal may be an error
circulated & audited incomplete ➢ Also used in determining which
= increased cost Differences must be carried over to the selection method to use
schedule of audit differences and NOT used in:
consider effect on audit report ➢ Sample size
➢ Extrapolation of the results of
the sample to the population
Extrapolate Factors the influence sample size
= R per sample item X population ➢ Certainty that is required
➢ Acceptable error level
➢ Expected errors
➢ Population size
➢ Stratification
SAMPLING
, Summary of things to remember
CR = low , then DR= higher to maintain Stratification : MUS (high value = overstatement)
the audit risk to an acceptable level • Division of … (populations into ➢ Population = divided into
subpopulations) monetary units
CR= low = more reliance on internal • On the basis of : ➢ Sample unit= individual
control ➢ Rand value monetary unit (R)
Smaller sample ➢ Age analysis (for debtors) ➢ After R selected = traced back
to physical item
(invoice/account)
➢ Column w/ accumulated values
of relevant account balances/
transactions
Expected error % is greater than Estimated error population is greater JUDGEMENT used in the following
tolerable error % than acceptable (tolerable) error when planning the sample:
= larger sample size = unsatisfactory result ➢ Sampling unit
➢ Acceptable error %
Think of consequences to this : ➢ Expected error %
More assurance = larger sample size ➢ Fictious sales ➢ Determining confidence level
➢ Incorrect amount in xxx ➢ Determining the definition of
Increased sample size = more accounts ➢ Amount in that journal may be an error
circulated & audited incomplete ➢ Also used in determining which
= increased cost Differences must be carried over to the selection method to use
schedule of audit differences and NOT used in:
consider effect on audit report ➢ Sample size
➢ Extrapolation of the results of
the sample to the population
Extrapolate Factors the influence sample size
= R per sample item X population ➢ Certainty that is required
➢ Acceptable error level
➢ Expected errors
➢ Population size
➢ Stratification
